Tennessee’s sales tax holiday has gotten so popular that retailers are marketing it as Black Friday in July.
During the last weekend in July, shoppers can save nearly 10% on more than 150 types of items. Across the state, shoppers will keep an extra $10 million in their collective pockets, according to the state Department of Revenue.
The three-day tax break, which began this morning and ends at midnight Sunday, is linked to back-to-school shopping, but all shoppers save on items ranging from clothing to computers as students prepare for the return-to-the classroom season.
State and local taxes are not collected on exempt items that cost $100 or less per item and computers that cost $1,500 or less. That also applies to exempt items unrelated to school needs.
“Back to school has always been a busy time for us, but tax free added a whole new level to it,” said Jackie Crumpton, general manager at JCPenney in Foothills Mall, Maryville. “Because people will shop for themselves, too, and for the whole family to save that 10%.”
The state emphasizes that the sales tax holiday is for everyone and includes items beyond school supplies. Even Crumpton, well-versed in Tennessee retailing, didn’t realize the full scope of the holiday at first.
“I didn’t realize until the second year we had it that diapers are tax free. I had no clue until I was in position to where I needed to buy diapers. It’s definitely a lot of savings for the whole family,” Crumpton said.
For her store, the tax-free holiday folds in nicely with JCPenney’s Spirit Week, a campaign to encourage stores to have fun and renew their “warrior spirit” prior to the busy back-to-school shopping season, according to the company website.
“The timing’s perfect for our region and for our state. That’s why we’re all dressed in team colors today,” Crumpton said Wednesday.
While large stores and national chains are all about marketing back to school, the National Federation of Independent Business is urging consumers to not forget small retailers.
NFIB is the largest small business association in the U.S. with offices in Washington, D.C., and all 50 state capitals. With its national headquarters in Nashville, NFIB is well aware of Tennessee’s Tax Free Holiday.
Jim Brown, state director of NFIB, said this weekend offers a much-needed lift to small businesses across the state.
“Back-to-school sales already put people in the mood to shop,” Brown said in a statement. “The sales tax holiday makes it more of an event and helps people stretch a dollar.”
He also offers a cautionary note. This year’s sales tax holiday comes at a time when small-business optimism has declined. The NFIB Small Business Optimism Index dipped 1.7 points last month to 103.3. Overall, although small business optimism remains near historic levels, sales expectations and profits declined in June as uncertainty increased to levels not seen in over two years, he said.
“We hope that people will do their back-to-school shopping this weekend at small, locally owned businesses,” Brown said. “Small business is the engine that drives Tennessee’s economy, so when you help small businesses, you help everybody.”
Raina Kant, manager and co-owner with her husband Kyle of Razzberries Boutique across from the Blount County Courthouse in downtown Maryville, is all for that.
During the tax-free holiday, larger stores get most of the attention, but smaller retailers take advantage, too.
“The big boxes kind of wipe us out a little bit, but by starting early I definitely get a grip on it,” said Raina Kant, whose store specializes in stylish women’s clothing, accessories and jewelry.
That’s why she offered an across-the-store 20% discount (excluding Brighton, which doesn’t allow it) before the tax-free-holiday began. That’s an extra lure to shoppers before the 10% tax savings kick in.
Which was fine for the clothing, lunch boxes and backpacks, all included in the tax break, but what about the purses and jewelry and such? Kant had a plan for that, too.
“I’m doing everything in the store,” she said.
“Everything in the store is tax free. I’m paying the taxes. What isn’t covered (by the tax holiday) I’m covering,” Kant said. Besides, ”It’s easier to add up on the machine.”
That’s the kind of decision small-business owners can make. She also makes a strong pitch for local shopping.
“People go to Knoxville. They don’t understand that by shopping in Maryville the tax dollars actually stay in Blount County. That local tax stays here and helps pay the officers and trash pickup and everything else. But they still have the habit of going to Knoxville. It’s hard to break that.”
The state isn’t about to take sides on big versus small or local here versus local there, but it does encourage shoppers to take advantage while they can.
“This is an important savings opportunity for everyone. We want to remind people about it because it only happens one weekend a year,” Revenue Commissioner David Gerregano said.
For more information, visit www.tn.gov/revenue.